• Western allies impose more sanctions on Russia

• MYR to fluctuate in the range of 4.1830 and 4.2100 against the USD

Global Highlights

Dollar index – The greenback rose 0.63% to 99.124 amidst the RussiaUkraine conflict uncertainty. The focus has partly shifted back to the monetary policy as the Fed will raise its interest rate for the first time since the pandemic started on Wednesday night. Western allies had also announced a new set of sanctions against Russia by ending its “most favoured nation” trade status, on par with North Korea and Iran. Meanwhile, the University of Michigan Consumer Sentiment fell to 59.7 in March from 62.8 in February, (cons. 61.4) which marked the lowest reading since November 2011.

US equities – Wall Street closed lower on Friday as the Dow Jones fell 0.69% to 32,944, S&P 500 dropped 1.30% to 4,204 while the Nasdaq lost 2.18% to 12,844. The benchmark 10-year UST yield added 0.5bps to 1.992%.

Euro – The euro fell 0.67% to trade around 1.091 following the ECB’s decision to unwind ECB assets purchases quicker than initially planned.

British pound – The pound fell 0.37% to 1.304 as investors were looking for another 25bps hike to 0.75% by the BoE this week, which will be the third consecutive rate hike since December 2021. In January 2022, the UK’s economy grew 0.8% m/m after a 0.2% contraction in the last month of 2021.

Japanese yen – The yen lost ground as it depreciated significantly by 0.99% to 117.29, reaching the weakest level since 2017 as the divergence between the BoJ and other central banks widens.

Chinese yuan – The yuan eased 0.27% to 6.339 as market players were keeping an eye on the Fed and the PBoC this week over some policy decisions.

Korean won – The won extended its weakening trend as it depreciated 0.29% to 1,231.95, the lowest level since May 2020 due to the stronger dollar.

Australian dollar – The Aussie dollar shed 0.88% to 0.729, erasing recent gains. RBA governor Philip Lowe warned last week that borrowers should prepare for a rise in the interest rates this year with inflation set to surge this year.

Commodities Highlights

Crude oil – Brent rose 3.05% to US$112 per barrel while the WTI climbed 3.12% to US$109 per barrel, as escalating bans on Russia trade could further exacerbate the oil supplies woes.

Gold – Gold slid 0.43% to US$1,988/oz, retreating away from the near record high last.

Malaysia Highlights

Malaysian ringgit – The ringgit depreciated 0.19% to 4.196 and traded within the range 4.1973 and 4.1875.

KLSE – The FBM KLCI declined 0.78% to 1,568 amidst mixed sentiment in the global stock markets. Detailed transactions showed that retailers were net buyers with RM116.9mil, while being offset by foreign investors and local institutions with RM84.5mil and RM32.1mil, respectively. 

Fixed Income – Local sovereign bonds traded sideways and in low volume. The benchmark 3-year was -2.0bps to 2.650%, and the 7-year +0.5bps to 3.550%, but the 5-year and 10-year remained flat at 3.290% and 3.675%, respectively.

Rates – The IRS yield curve shifted higher as the (3Y) +2.5bps to 2.920%, (5Y) +1.5bps to 3.155%, (7Y) +0.5bps to 3.355% and (10Y) +2.0bps to 3.570%.

Against major currencies – The ringgit had the upper hand against the EUR, GBP, AUD, JPY, CNY, THB and PHP, but fell against the SGD, IDR, and VND.

Ringgit Outlook for the Day

We expect the MYR to trade between our support level of 4.1800 and 4.1830 while our resistance is pinned at 4.2070 and 4.2100.

Source: AmInvest Research - 14 Mar 2022